The fifties are the final lap in the process. Retirement is knocking at the door and this is the time when one has to be fully ready in order to face the situation. All the work of the last few decades will start bearing fruit at this point of time and hence it is an important point in the lives of most people.
This is the period when one has one final chance to do something to ensure some order at the time of retirement. Most people are content with just ensuring that some final tweaking is done to direct various investments towards the desired level. The important thing at this stage of life is to see that the various investments are in a position that will provide the person with some sort of income at that later stage in life when the cash flow is a very vital component of the whole process.
This can also be a time when one can make decisions about retiring early if things have gone very well so that all the targets are achieved and there is no need to work any longer just to earn income. On the other hand, there is often a painful decision for some people to have to postpone retirement by some time so that some gaps in their savings bag can be filled in.
Retirement Comes Very Near
When a person is in his fifties retirement is just around the corner. This is especially true for all those who have a salaried job in a concern that has a retirement age in force. The first image of the retirement period is also a time when there is a clear way in which the future seems to come on the horizon for the individual. This definitely has an impact on the person in terms of looking at that period. One starts thinking of the changes and the impact that this will ring in during the times to come. There is also a feeling of apprehension for several people who are not sure about what they will do. They are not sure of how they will be able to tackle the issue of retirement and actually face up to the situation.
No Time Left
This is not a period when one can say that I want to do retirement planning over the next two decades and hence here is the long-term plan in view of the situation. The traditional long-term approach to retirement planning will not work in this situation. There is also no time left to waste on several other areas that do not need planning from the retirement perspective. One has to be very careful on this front too as one would have to undertake each and every activity keeping the time factor in mind. One has to understand that when one is in the early fifties there are still three to five years left for retirement. This is quite a long period of time but for the purpose of long-term retirement planning when one needs to look at decades to achieve several goals this period might look to be inadequate.
Important Goals To Be Met
There has to be a very clear priority of the various goals that are set before the individual. This will ensure that one is able to concentrate on the goals that are more important and that these will be achieved over a specific time period. The importance of looking at the various goals in this manner is that the important goals have to be targeted and then these have to be met so that there is no big gap between the planning and the meeting of requirements. The achievement of a large number of goals might not be possible at this stage of life and with the development of various conditions the situation can get further complicated. There might also be a situation where the individual would be required to ensure that only certain goals are met otherwise it could result in a position where nothing much is achieved on several fronts. Thus, in the effort to achieve all the goals one might not achieve anything substantial, and due to this, a careful partition might be required.
Actual Retirement Preparation
There are two aspects related to retirement planning that has to be known here. The first is that there will be an element of retirement planning that takes place during the entire life of the individual if one desires to do so. This is however just one small part of the entire issue. At the same time, the other thing is that the individual also has to undertake an actual retirement preparation. This is different from retirement planning which deals with the financial aspects as in the actual retirement preparation one has to go beyond what has been promised and then they must look at some of the actual things that they need to do in order to ensure that they are ready in all respects.
This preparation is vital because a person has to be ready in all respects to be able to tackle the issue of retirement. This includes being mentally ready to do the things that a person has to tackle in their day-to-day living.
Last Financial Decisions
This does not mean that the financial part of the planning process is over. There are still some last financial decisions that remain and these have to be made in the proper manner so that they are useful at a later stage when one actually requires them to be productive from various angles. These last financial decisions are mainly related to how a person will ensure that there is some flow from various sources or if there is some area that needs some amount to be invested because this will help in the overall process then it can be completed even at this stage in life. There is also the question of a few years remaining for the individual and hence these can be used for the purpose of making those changes that are required for the purpose.
Moving Funds Around
All this would require some funds to be moved around from one area to the other so that exact requirements are met. The need to move the funds around cannot be avoided because at the time of retirement the funds have to provide income for the individual. There has to be a constant flow of income from the various investments. This will require that several investments that are lying in areas that are not very liquid be moved to areas where there will be some constant income from these sources. There might also be the requirement of some last-minute moving around because of the fact that there is some requirement that has to be met with respect to the total investments and these have to be clarified and then tackled on an overall basis.
More Targets Set
In this case, there are some additional targets that are set by the individual and these have to be achieved by the time they enter the retirement period. Very little time is available, at best a few years, to achieve these targets. The targets are also made with a short time frame in mind. One has to be alert that there should not be something that is very radically different in these targets because of the fact that at this stage in life some major change cannot be implemented in the way things have been done.
In some cases, the additional targets are just parts or subsets of the original targets that are available for a person. This will mean extending the efforts already made by a person to an additional area and this is not a very difficult task. Once this kind of alignment and clarity is achieved there is little to worry about for a person.
How To Go About The Process?
This is the time period when one has to ensure that the risk is reduced considerably within the portfolio. This means moving a part of the portfolio to debt and reducing the high-risk part of the equity portfolio. One way to do this is by having only large-cap stocks in the portfolio. Similarly, only those funds that invest in large-cap companies can be selected. This period will also mark the time when the payments on the housing loan get over plus various parts of bullion like gold and other precious metals that have been accumulated would be used for various purposes. This is the time when a lot of the planning results are witnessed. One has to ensure that the process gets completed without any hitch.